Despite Economic Concerns, The IT Economy Is Growing Fast

The economy has felt uncertain for several years now. The pandemic certainly didn’t help most companies – unless they were selling video call solutions – but the expected strong recovery never really happened. It’s like most major countries are limping along with hardly any growth at all.

But there is one sector of the economy that is doing well now and is predicted to be doing even better in 2024. Information technology. IT spending has increased by 4.3% in 2023 and this is not even including the very recent wave of spending on artificial intelligence (AI).

Gartner has suggested this is because IT spending in recent years has focused on very visible projects – efforts to improve customer experience or sales. Their analysts predict that more attention will now be paid to optimization. This means a stronger focus on internal IT systems such as customer relationship management (CRM) and enterprise resource planning (ERP).

These systems have traditionally been expensive, although the more recent versions of these systems are cloud-focused and mostly offer pay-as-you-go options. Spending on devices is down this year, but all these software and cloud purchases are dramatically up.

This matches up with the 20.4% forecast increase in cloud spending that has been estimated for 2024. In a statement, Sid Nag, Vice President Analyst at Gartner said: “Cloud has become essentially indispensable. However, that doesn’t mean cloud innovation can stop or even slow. The tables are turning for cloud providers as cloud models no longer drive business outcomes, but rather, business outcomes shape cloud models.”

This is another interesting point. Many corporate leaders have just got used to the idea that the cloud can shape how their business works. It means they can pay for services as they are used, rather than sinking a lot of cash upfront into IT systems. However, as Sid suggests, the wave of innovation is now ahead of the cloud itself – innovative business ideas are now defining how the cloud works.

There is a confidence around IT at present. Cloud architecture is now underpinning almost every major organization. Platforms are becoming common across many different sectors – often changing how people work. Generative AI is quickly moving beyond the hype and becoming a tool that can be used to augment tasks — so it makes people more productive, rather than replacing them.

IT has become a more strategic central core for most organizations today, across all industries. AI, and similar tech, is helping to drive up productivity and quality and also increasing the speed at which new ideas can be tested. This is leading to a general wave of innovation that is supported by the platform and cloud economy.

Although the general economy may still feel stagnant in Europe, and even the US, for those connected to IT there is still quite strong growth ahead. Companies like IBA Group, with expertise and experience across a range of these growth areas, are likely to benefit for companies that need their advice and technical skill.